Importance of Insurance in Personal Injury Cases
Barry: In the vast majority of cases, there's going to be an insurance company on the other side, which is going to be controlling the defense. The only real exceptions to this is when you're talking about governmental entities and some very, very large companies, otherwise you're going to have an insurance company who is going to be providing the defense and funding the settlement for the at fault party.
That means that the insurance company's going to be hiring lawyers who are going to be providing the defense to the at fault party. It also means that they're going to be the ones who are going to making decisions about whether money's going to be offered for a settlement, when that's going to happen, and how much, when things are all said and done. And the question of how much insurance coverage is available and who the carrier is can be really important in trying to evaluate the case for settlement.
Pam: So then, what do you mean by how much money is available? Aren't insurance companies large financial institutions?
Barry: Well, they're large financial institutions, but an insurance policy is essentially a contract, and in that contract, there are policy limits. What those amount to is a cap as to how much the insurance company will pay out for any given claim.
Now, when you talk about what the policy limits are, these are usually broken down to per person and per occurrence. So a lot of people will carry liability insurance for their car with policy limits that are $100,000.00 per person and $300,000.00 per occurrence, and what that means is, that the insurance company will pay any one person who was hurt in an accident up to $100,000.00 and $300,000.00 for any one accident, regardless of how many people were hurt, but the state minimum is actually $25,000.00 per person and $50,000.00 per accident, which, for any really significant accident, is not very much money at all.
So when it comes to the issue of policy limits, insurance companies have an obligation, a legal obligation, to try to get cases settled within the policy limits. Now, when there is a large claim, something that has potential to result in a verdict, in excess of the policy limits, that's an important consideration for insurance companies because they actually have this legal obligation to try to get the case resolved within the policy limits. Having the threat of a verdict in excess of policy limits gives you a lot of leverage in negotiating a settlement because they have to be concerned about this possibility of, what's called, an excess verdict, a verdict in excess of the policy limits.
Pam: And why does it make a difference which insurance company is involved?
Barry: Which is insurance company is involved makes a big difference because different companies take different approaches to handling claims. Some of the really non-reputable companies, the ones that will ensure you over the phone or advertising in the middle of the day for, what they call, SR-22 insurance, those are generally called substandard insurance carriers and they, very seldom, will make any type of a reasonable offer at any point during the course of the case.
Even some of your main line automobile liability carriers will often take very aggressive stances towards settling claims. Allstate and State Farm, American Family, are often fairly aggressive in defending claims, which means that it can be very, very difficult to get cases settled.
At the other end of the spectrum, you'll have large commercial carriers. These are the insurance companies that are going to be defending large businesses. They often have fairly large policies, which means that there are a lot of resources to defend the case, but on the other hand, they're often very reasonable about trying to get cases resolved, and taking all those approaches to claims into consideration is part of how I go about evaluating cases for settlement.
Pam: So how can you tell which are bad companies to deal with?
Barry: Well, the Illinois Department of Insurance actually publishes complaint ratios for the various insurance carriers that are licensed throughout the state, and essentially, what this does is, it takes a measurement of how frequently are these companies getting complaints from consumers about how claims are handled, and this is something that you can access online through the Illinois Department of Insurance's website.
Pam: Okay. So what if there's no insurance?
Barry: Usually, if there's no insurance, and you're not dealing with a large governmental entity or a large business on the other side, you're going to be completely out of luck because the only option for collecting any compensation for injuries that you may have suffered would be to go ahead, file the lawsuit, go through the entire pretrial procedures, try the case, get a verdict, and hope that, once you begin seizing their assets, that they're not going to declare bankruptcy on you. Most often, that's going to be the outcome, is that somebody's going to declare bankruptcy and you're going to be sitting at the end of their line of creditors with their cell phone company, their credit cards, and so on and so forth, and the odds of collecting anything are slim indeed.
Trying to collect money from somebody who doesn't have any kind of insurance is often a time wasting, money loser and it's really unfortunate. The only real exception for being able to compensate people where there's no insurance available is if there's an uninsured motorist claim, and basically what an uninsured motorist claim is, it's a situation where, if you have full coverage on your car and you are involved in an accident with somebody who, either doesn't have any liability insurance or somebody who's a hit and run driver, in that case you can look to recover compensation through your own policy, but outside of that kind of situation, most often you're out of luck.
Pam: This has been, Fighting for What's Right, with personal injury attorney, Barry Doyle.